Rich South Africans go on a property shopping spree

Even amid affordability constraints, South Africa’s 2025 property market saw unusually high transaction activity in mid- to high-value segments, driven by wealthier buyers.

This is according to Lightstone, which revealed that South Africa’s residential property market was busiest in the mid to premium segments in 2025, which differed from the usual trends observed in a robust market.

Lightstone reviewed about 200,000 transactions in 2025 in a market of approximately 4 million homes valued at over R500,000.

Sales below R500,000 were excluded due to the high prevalence of subsidised transfers and transactions in that segment that do not reflect open-market value.

Typically, in most residential markets, churn – the number of transactions in a period divided by the total housing stock – follows a “hump-shaped” pattern –

• At the entry level and in lower price bands, there is moderate to high churn in healthy markets, driven by first-time buyers (FTBs), investors, and younger households moving more frequently.
• Churn is often highest in middle-class family homes or mid-market areas, driven by upwardly mobile seller-buyers, growing families, and job relocations, and this segment is often a measure of the economic health of the middle class.
• Usually, churn is lowest at the high-end, luxury market because of a smaller buyer pool, longer holding periods and more discretionary transactions.

South Africa has experienced a period where there has been reduced activity in the country’s lower price bands relative to the mid and higher bands, consistent with a market sensitive to macroeconomic stress.

In fact, churn in the lower price bands is extremely sensitive to affordability conditions, and when interest rates rise or credit tightens, activity drops sharply as these borrowers are disproportionately affected.

Conversely, Lightstone noted that cash buyers, often in higher-income, higher-priced bands, face fewer constraints.

Property churn was not only greater in higher-value residential areas than in lower-value areas, but higher-value areas were also more likely to have properties purchased in the names of companies or trusts.

“In societies characterised by significant wealth inequality, high-net-worth individuals tend to drive demand in the upper price segments of the property market,” said Lightstone’s Managing Executive of Real Estate, Hayley Ivins-Downes.

“At the same time, slow wage growth among middle- and lower-middle-income households weakens demand at the entry level, resulting in a strong high-end market and a constrained lower-tier segment.”

Ivins-Downes added that in South Africa, structural constraints on supply further compound this imbalance.

The constraints include a shortage of affordable housing, restrictive zoning regulations, investor activity displacing first-time buyers, and shifting demographic trends.

The Western Cape still reigns

“Our analysis shows that property turnover in 2025 was higher in South Africa’s higher-value residential areas than in lower-value areas,” said Ivins-Downes.

“However, the majority of seller-buyers chose to remain within the same province and, in many cases, within the same municipality.”

Among those who did relocate to another province, Lightstone found that the Western Cape was the preferred destination.

“Notably, it was the only province to record a net inflow of sellers who repurchased property over the past five years,” she said.

Excluding FTBs, 83% of homeowners who sold and bought simultaneously stayed within the same province, and 63% remained in the same municipality.

In the City of Cape Town, 80% of sellers purchased again within the municipality, while 20% moved from Cape Town to other areas in the Western Cape.

Among those who left the province, 17% relocated to Gauteng. Of those who remained in the Western Cape, the most popular destinations were Langebaan (including surrounding villages and small towns), Hermanus, and George.

Although the data for 2025 were not complete at the time of writing, it appears that the Western Cape attracted fewer residents in the above R500,000 house bands in 2025 than in the previous four years.

Gauteng, meanwhile, appeared to have lost the least since 2021. This shift could be explained by rising prices and affordability pressures in the Western Cape, particularly in Cape Town.

At the same time, there have been declining remote work opportunities, increased return-to-office mandates, and relatively attractive property values in Gauteng.

Lightstone added that each of the other seven provinces also had a net loss in each of the past five years, and this meant it was only the Western Cape which had a net gain from migration in the category above R500,000.

Interestingly, Lightstone found that around two-thirds of repeat buyers in the mid- and high-value categories paid more for a property than they sold it for.

However, the proportions dropped in the luxury (50%) and super luxury (36%) segments, possibly due to the number of pensioners scaling down.

Only one-third of those who sold in Cape Town and bought elsewhere bought a higher-value property, whereas two-thirds of those who bought in Cape Town after selling elsewhere did so.

Seller-buyers in the Traditional Townships and Affordable segments led the way in terms of upgrading value. In fact, Lightstone found that the lower the price band, the higher the proportion of purchases at higher values.